It’s tough out there for SMEs – so how can they find efficiency savings?

In today’s rocky business landscape, it’s more essential than ever for SMEs to find efficiency savings. Brexit and the knock-on effect of big business problems are just two of the factors making their futures more difficult and unpredictable. And with revenue unreliable, it becomes essential to look at other areas where time and money can be saved.

Knock-on effects of the #CarillionCollapse

One of the most significant things affecting SMEs today is their reliance on other, bigger (and possibly vulnerable) businesses. The collapse of Carillion in January 2018, for example, will have substantial, potentially dire consequences for thousands of the UK’s SMEs.

News of the construction company’s collapse raised immediate concerns, of course, for Carillion’s 20,000 permanent staff, and for the continuity of vital building projects – but we mustn’t disregard the wider effects of liquidation. Carillion had a long list of subcontractors, estimated in recent reports to number up to 30,000 SMEs, including many self-employed construction workers. The harsh truth is that subcontractors are likely to be hit even harder than the company’s own staff. They won’t be covered by basic employment rights, after all. And they’re less likely to be paid all – if any – of what they are owed, which has potentially catastrophic consequences, throwing the very viability of many businesses into doubt.

While Carillion is a prominent case, it’s not the first and won’t be the last case of a big name sneezing and the SMEs they deal with catching a cold. And with most SMEs simply lacking the financial flexibility to absorb late (or, worse still, missed) payments, and the loss of major clients, it’s wise in this unstable landscape to think about where efficiency and cost-saving gains can be made elsewhere. Thereby protecting small businesses (to some extent) from larger problems.